Future of the 'Net at Stake

What does it portend when the Information
Technology & Innovation Foundation (ITIF) refers
to an upcoming meeting as "The Gathering
Storm"? It potentially means strong winds
(of change) out of the East that could do
more than shake trees in the U.S.

The International Telecommunications
Union's treaty conference in Dubai that
begins Dec. 3 includes a collection of proposals
that could give such countries as
China, Russia and some Arab states the
power to impose Internet traffic taxes or
inspect the contents of communications,
both of which the U.S. sees as treaty dealbreakers.
U.S. cable operators and content
providers have much riding on it.

Cable operators have positioned themselves
as leading Internet Service Providers.
Anything that adds cost to using bandwidth-
as the new platform for delivering
not only data and Internet content but,
increasingly, TV everywhere-affects the
value of the platform they are positioned to capitalize on.

"At a minimum, the uncertainty created by the talk of adding
an international layer of regulations onto the Internet disrupts
business and engineering decisions," says FCC commissioner
Robert McDowell, who is a member of the U.S. delegation to
Dubai. "It's difficult to plan investments and innovation if you
think you'll have to ask international bureaucrats for permission
first. Also, if these pro-regulation ideas gain steam, look for
the economics of the Internet business environment to produce
higher prices for ISPs, content and application providers alike.
Uncertainty never decreases costs."

Among the proposals being offered up in advance of the conference:
a mandatory "sender pays" model that could create a
tax on Internet traffic used to replace dwindling revenues from
payments for the exchange of traditional telephone traffic.

"We're still at a very early stage in the Internet's development,
and it would be an enormous shame if it were prevented
from reaching its potential by the imposition
of unneeded regulations spurred on
by nations with narrow, self-interested
agendas," says ITIF senior research fellow
Richard Bennett. (The ITIF board is made
up of academics, computer companies
and analysts.)

The National Cable & Telecommunications
Association had no comment on the
recent proposals, but it is solidly behind
the Congress' resolution, passed last summer,
opposing a more ITU-centric model
of Internet governance. The resolution,
the NCTA said, "sends a strong and clear
message that the United Nations and International
Telecommunications Union
should cease efforts to assert and impose
unprecedented governmental regulation
over the Internet."

The good news, according to a variety of sources, is that some
European countries have backed off their proposal of a senderpays
mandate, which would charge companies like Google for
sending traffic, and content, over the Internet. The bad news is
that some other countries-India, for instance-have picked
up on the idea. Then there is the cybersecurity issue, which
has emboldened Russia, China and others to push for greater
government control over the Web in the name of security.

The ITU's inspector general has said recently that the conference
is not about taking over the Internet. But the U.S. is
expected to take a trust-but-verify approach to those assertions.

Last week, the U.S. and Canada proposed that the conference
first deal with the threshold questions relating to broadband
before getting into any of the nuts and bolts of the treaties.